BCL hit with K27m tax billBOUGAINVILLE Copper Limited has been...

BCL hit with K27m tax bill

BOUGAINVILLE Copper Limited has been hit with a K27 million outstanding tax bill arising from dividends through investments.
In a landmark National Court case, Justice Gibbs Salika ordered BCL to pay taxes for the years 1999, 2000 and 2001 to Internal Revenue Commission after an unsuccessful court battle.
BCL — a subsidiary of mining giant Rio Tinto and 19 per cent Papua New Guinea owned — was the company that had mined at Panguna in North Solomons Province since 1972 until its closure in 1990, due to the crisis.
Justice Salika ruled in favour of the defendant — the chief tax collector — who initially wanted to collect the tax that was due and payable by BCL in accordance to its statutory entitlement by October 24, 2003.
The proceedings started when BCL, rejecting the tax assessment for the three years, went to the National Court last year to seek declarations that it was not liable to pay the K28 million.
This was after the tax office served a notice to BCL with the initial amount of K28,075,581 in September 2003. This followed an audit that found BCL had generated substantial income from investment shares in Australia and PNG through treasury bonds and deposits.
IRC withdrew the notices issued under Section 272 of the Income Tax Act 1959. The tax office also agreed to stop issuing any more notices.
IRC amended the notices, resulting in a reduction of the outstanding tax liability — arriving at a figure of K27,805,115.75. In January this year, IRC issued another notice after BCL did not paid the liability in pursuant to the notices of Section 272 of the Act.
Handing down the decision, Justice Salika gave orders that banks which had been served the Section 272 notices do everything necessary to comply with the orders.